[Click eStock] "Samsung SDS, Profit Margin Expected to Rise... Coverage Initiated"

Hana Securities announced on the 18th that it is initiating coverage on Samsung SDS with a 'Buy' investment rating and a target price of 200,000 KRW.

Researcher Kim Gyusang stated, "We expect corporate value enhancement through high growth in the cloud and data center business, expansion of the digital forwarding service share, and a decline in the proportion of affiliate sales, which had been a valuation discount factor."

Kim added, "Samsung SDS is expected to fully launch generative artificial intelligence (AI) services for enterprises this year," and said, "'Fabrics,' scheduled for release within March, allows companies to integrate large language models (LLM) they desire into their cloud systems."

He further explained, "The generative AI-based enterprise collaboration solution 'Brity Copilot' focuses on improving the work efficiency of corporate members," and analyzed, "It enables essential corporate tasks to be performed anywhere via voice, and by linking with enterprise resource planning (ERP), it can easily generate necessary data and information, which is expected to drive high corporate demand."

He continued, "The company currently operates 18 data centers worldwide, and cloud service (CSP) sales recorded 627.4 billion KRW in 2023," forecasting, "690 billion KRW in 2024, a 10.1% increase from the previous year, and 720 billion KRW in 2025, a 4.3% increase."

Accordingly, overall performance is also expected to increase. He projected, "Consolidated sales in 2024 will rise 3.4% year-on-year to 13.7254 trillion KRW, and operating profit will increase 15.5% to 933.3 billion KRW," noting, "The IT services sector, especially the high-profit cloud sales proportion, is expected to rise, leading to a simultaneous increase in operating profit margin."

This content was produced with the assistance of AI translation services.